Experts project over 2.5% of all U.S. houses will be solar-powered by 2024? This means that solar panel installations will only continue to grow in popularity.
If you’re among the increasing number of homeowners interested in solar power, you’re likely wondering how you’ll pay for the installation. It can be confusing to figure out your options and which one is the best for you.
There are a few solar panels financing options available to homeowners. Here’s a guide to help you understand the different types of solar panel financing available:
Lease or Power Purchase Agreement (PPA)
PPA helps you lease the solar panel equipment from a solar company, and in turn, you will make monthly payments to the solar company. A solar lease is a long-term contract, usually around 20 years. On the other hand, PPAs are usually shorter contracts, anywhere from five to 15 years.
In both PPAs and solar leases, you will have the option to purchase the solar panels at the end of the lease agreement. Both leases and PPAs offer you protection against rising energy costs. If electricity rates go up during your contract, your monthly payment will stay the same.
Personal Loans
You can obtain solar panel financing in the form of a personal loan from a financial institution or other leaders. If you decide to finance your solar panels through a personal loan, it’s essential to compare different lenders’ interest rates and loan terms.
Personal loans often have lower interest rates than credit cards, and the terms can be longer. This can make it easier to finance a solar panel system.
However, ensure you read the fine print before signing any loan agreement. It would be best if you also understood all the fees and penalties associated with late payments or defaulting on the loan.
Home Equity Loans and HELOCs
You may be able to finance solar panels through a home equity line of credit if you have equity in your home. A HELOC typically offers a lower interest rate than a personal loan, and the repayment terms are usually longer.
HELOCs are best for homeowners who plan to stay in their homes for several years. If you sell your home before the solar panels are paid off, you may need to pay off the HELOC or sell the house with the solar panels installed.
Solar Panel Loan
Solar panel loans help you pay for your solar panels in monthly installments. This can be a great way to finance your solar investment and spread out the cost over time.
There are many lenders who offer solar panel loans, so it’s important to compare interest rates and terms before you choose one. These loans are great for people who want to switch to solar energy but don’t have the cash on hand to buy the panels outright.
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Follow the Solar Panels Financing Options Above
Installing solar panels in your home is a significant investment. This means paying for them is an even bigger responsibility. Fortunately, there are a few solar panels financing options available to you.
It’s essential to understand the different types of solar panel financing and what each option entails before you make a decision. If you’re unsure which option is best for you, consult with a financial advisor or solar company.
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